In a groundbreaking development, calculations by the specialized portal "Infinite Market Cap" reveal that the total value of all Bitcoins has surpassed an impressive $1.42 trillion (€1.3 trillion). This milestone propels the oldest cryptocurrency ahead of the entire market cap of Silver, which stands at $1.38 trillion. The surge in Bitcoin's value has been attributed to various factors, including the strategic moves by wealth management giants such as BlackRock, Grayscale, and Fidelity, who have launched Bitcoin funds in the U.S., approved by the SEC in January.
Bitcoin's Market Performance:
As of Monday afternoon, Bitcoin broke the $72,000 threshold on various stock exchanges, marking a remarkable ascent in its market value. Notably, the cryptocurrency has experienced a staggering 62% increase against the U.S. Dollar since the beginning of the year.
Influence of Bitcoin ETFs:
The rapid surge in Bitcoin's value can be largely attributed to the introduction of Bitcoin exchange-traded funds (ETFs) by major financial institutions like BlackRock, Grayscale, and Fidelity. These ETFs, approved by the U.S. Securities and Exchange Commission (SEC) in January, allow investors to participate in Bitcoin without directly acquiring or managing the digital currency themselves.
Bitcoin's Position in the Market:
Despite its recent surge, Bitcoin's market dominance is still overshadowed by gold, with the total global gold reserves reaching ten times the value of Bitcoin at $14.7 trillion. Following gold in the rankings are publicly traded companies, with Microsoft leading at a market value of $3.02 trillion, followed by Apple ($2.64 trillion), and NVIDIA, the AI chip manufacturer, at $2.19 trillion.
Market Caution and Historical Perspective:
However, the soaring value of Bitcoin doesn't guarantee sustained growth in the future. Past instances, such as the plunge from the record high of $69,000 in November 2021 to under $17,000 within a year due to the FTX exchange scandal, underscore the volatility and risks associated with cryptocurrency investments.
The Anticipated Halving Effect:
Analysts anticipate that the upcoming "Halving" event on April 20, where the reward for Bitcoin miners is halved, might have been factored into the current Bitcoin price. Historically, such events have led to a slower growth in Bitcoin supply, often resulting in an increase in its market value.
Bitcoin's Unrelenting Rally:
Bitcoin's record-breaking spree continues, with the cryptocurrency reaching $72,259, a 5.6% increase, and a cumulative gain of approximately 70% since the beginning of the year. Market experts, like Timo Emden from Emden Research, suggest that investors may now set their sights on the $80,000 milestone.
Market Outlook and Influencing Factors:
The positive outlook for cryptocurrencies is buoyed by the expectation of long-term lower interest rates and increased demand for the approval of the first publicly traded Bitcoin ETFs. Investors also anticipate a further boost from the upcoming Halving, which artificially limits the supply of new Bitcoins, potentially driving prices even higher.
Institutional Acceptance and Market Impact:
Recent news of the London Stock Exchange accepting applications for listed Bitcoin and Ether bonds for professional investors in Q2 2024 is expected to provide an additional boost to Bitcoin. This move is seen as a crucial step towards broader acceptance of digital assets, further validating the growing institutional interest in these virtual currencies.
Spillover Effects on Crypto-related Stocks:
The surge in Bitcoin's value has not only impacted the cryptocurrency market but has also translated into increased demand for stocks within the crypto universe. In pre-market U.S. trading, shares of Coinbase Global rose by 6.6%, while stocks of crypto miners Riot Platforms and Marathon Digital experienced gains of over four percent.
Conclusion:
As Bitcoin sets new all-time highs and captures the spotlight in the financial landscape, the cryptocurrency market continues to evolve, influenced by various factors ranging from institutional adoption to market speculation. However, caution remains paramount, given the inherent volatility and unpredictability associated with the cryptocurrency space.